Why are even billionaires shying away from buying Premier League and Championship clubs?

02/11/2015  48 Comments  [Jump to last]

"Currently in the Premier League three clubs are for sale, Everton circa 170m, Aston Villa circa 180m and WBA circa 150m and there are no takers."

That's the contention of this article by Gindy Singh, which blows away the myth that football clubs are highly profitable ventures.

"Football club ownership is a very precarious business, where even very very capable international businessmen often fail and are bemused by the practices of football clubs."

» Read the full article at EPL Index


Reader Comments (48)

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Mike McLoughlin
1 Posted 02/11/2015 at 22:34:56
This is a decent read. Not particularly good news for the sale of Everton.
Peter Lee
2 Posted 02/11/2015 at 23:31:59
Confirms what I have said on numerous threads here over time. Buying a football club as an investment makes no rational sense. At best it's a vanity purchase, like buying a super-yacht or a private jet.

If they aren't queuing up now with all the money around from Sky they never will.

This article would also suggest that existing owners, investors if you like, would be mad to put more of their own money in. No hope of a return comparable to that available elsewhere exists. When people demand that the current owners of EFC put more money in, they should first explain why that would make sense to anyone not looking to lose money.

Robin Cannon
3 Posted 02/11/2015 at 23:35:38
The conundrum is that the billionaire owner model shouldn't be the aspiration, but the only way we could achieve the aspiration of well-run self-sustainability is for Kenwright to sell... for which we need a billionaire.

Swansea are 20% fan-owned with zero net debt, profitable, steadily growing turnover; a well run business translating into on the field success; and at a fraction of the fan-base and potential that we have.

They just had to go bankrupt to hit the reset button... Sigh.

Michael Kenrick
4 Posted 02/11/2015 at 23:43:05
The quoted price is interesting: cheaper than Villa! Well below the Sporting Kansas City figure from a couple of weeks ago (𧶙M) but much more in line with the reduced price Jay Harris quoted (𧵬M) back in September.

Still... no takers. And of course, EFC is "not for sale" anyway, so who cares?

Ian Robert
5 Posted 02/11/2015 at 00:04:05
Kinda blows the "there's hundreds of people trying to buy but Bill won't sell" out the water?
David Hallwood
6 Posted 03/11/2015 at 00:40:46
Alan Sugar called it the prune juice economy in that every penny that came into the club went right through down the pan to the agents and players.

The quicker the governing bodies introduce a wage cap the better, and don't say it can't be done because, if it works in the land of the free, it can work anywhere.

Terry Murphy
7 Posted 03/11/2015 at 05:57:19
I've woffled about this before on a previous thread. I can't see how a salary cap could work with European legislation the way it is. However, a squad limit might.
Winston Williamson
8 Posted 03/11/2015 at 13:13:23
Again, the question is: Do we need a billionaire owner? Or an owner with some progressive ideas and determination and capacity to see through with said ideas?

Is the club running at maximum potential right now? Or are we devoid of fresh ideas and motivation, with a lethargic mid-table-is-fine attitude and ambition?

With the current board, I'm reminded of an old friend who thought he was the best FIFA 96 player ever! He regaled us with stories of 9-0 wins and spectacular goals... until someone who could actually play (at world class level) showed him how it was played...

Kieran Fitzgerald
9 Posted 03/11/2015 at 13:44:58
If you are the current owner of a Premier League football club that is a well run, stable, profit-making business why would you sell? The Premier League is awash with money so you are going to make money on a well-run club. You only see clubs for sale that are poorly run and/or saddled with debt or a crap stadium.
Tom Hughes
10 Posted 03/11/2015 at 14:00:00
These things are cyclic. All clubs have changed hands in the past 15 years except ours... some several times... and more will in the future.

As regards not making a profit, if any of the prices mentioned recently are accurate, our current owners are set to realise profits of several hundred percent... despite investing and delivering nothing since taking over. I'm not sure that they would've got a better return anywhere else... certainly not for achieving so little.

Patrick Murphy
11 Posted 03/11/2015 at 14:11:06
Time is the key factor in any potential sale of Everton FC. Whether it is due to illness or other reasons, our current board members do not have time on their side and it would be far better for them to relinquish control to the right person(s) sooner rather than later.

If no provisions are made for the future of the club, we could very easily lose credit lines and other important financial aspects and find the club back in a similar situation it was in during the early 90s: rudderless and with various people fighting for control of it.

We don't need and probably won't find any Billionaires to buy the club but what we do need is people who understand the game and have the necessary skills to build upon what is already in place. Some would argue that there isn't that much to build on given the state of the stadium etc, but – regardless of what some believe – we are still a very decent club with (perhaps due to the financial state of the game) ambitions beyond our means; at least the fans still have that ambition to a large degree.

A clean handover is what is required at whatever point the club changes hands and hopefully the new people will carry on guiding the club in a way that gives it the best chances of success.

Whatever the overall sentiments towards Bill and his fellow board-members, change will happen at some point; we as fans cannot influence it and we have to trust the judgement of the current board to put the club first in whatever transpires in the future.

Jay Harris
12 Posted 03/11/2015 at 16:10:43
Patrick, some very good points there.

The market dictates what a business or club is worth and I do not think for one minute that there aren't potential buyers out there.

As the Kansas City guy said, talks took place but the price and the timing were not right for them.

The Premier League is one of the biggest worldwide sporting brands and opens up marketing opportunities for any wealthy person or company.

With Bill's illness and no apparent succession planning, the time is right for new owners... but some of the complications of doing a deal need to be faced and remedied.

Gordon Crawford
13 Posted 03/11/2015 at 16:36:25
And so the vicious circle continues with the sale of Everton.
I do believe we need a billionaire to help us break the monopoly of the super rich clubs.
Andrew Ellams
14 Posted 03/11/2015 at 16:38:16
If Everton had even close to the cash that our lovely neighbours had spent in the past 5 years we'd be in a much better position than they are. You don't need to be Man City or Chelsea but you do need somebody with a great business brain and a decent amount of cash to back it up.
Jim Lloyd
15 Posted 03/11/2015 at 16:57:54
Gordon, I don't think if I was a betting man, I'd bet for a buy out from someone like Abramovitch or Sheik Mansoor. However, you never know, dreams sometimes come true.

My guess is that something will be unveiled at the AGM. The Americans who discussed a sale with the Chairman couldn't agree a price but they felt that a sale would go through in a matter of months. That, at least is what their CEO said.

I'm hoping it's true and that we get a group in who will have a vision, a plan and the drive to realise it.

Raymond Fox
16 Posted 03/11/2015 at 17:06:58
Two things that are killing competition, are what David (#6) says in his post, and billion-pound owners – both these are a major deterrent for potential buyers.

We are only looking at the competitions through Everton eyes, but there are at least 13 other Premier League clubs + all the clubs in the Football League that have very little chance of rising to become Champions!

Jay Harris
17 Posted 03/11/2015 at 17:25:25
Raymond,

No disrespect but if you don't have faith in your ability to succeed, then why bother?

So many people are so scared of failure that they never take a risk. We are the fourth most successful team in the whole history of the Sport including a barren last 20 years when the cash prizes have been so high.That tells me we have unfulfilled potential.

If only somebody with more drive and ambition had had the chance to buy the club when Bill took over for £20M, we would be in an altogether better place...

Steve Carse
19 Posted 03/11/2015 at 17:28:43
To paraphrase Homer Simpson, and a perspective seemingly mirrored amongst many Evertonians these days, trying is the first step to failure.
John Raftery
20 Posted 03/11/2015 at 18:57:01
Jay (#18),

Where do you think someone with 'drive and ambition' would have taken us?

Who do you have in mind? Is it somebody with a lot of money?

Like Randy Lerner?
Like Joe Lewis?
Like Jeremy Peace?

Raymond Fox
21 Posted 03/11/2015 at 20:05:32
Jay, it's different world now that we are trying to succeed in, take a look who has won the Premier League since it began:
Man Utd 13 times, Chelsea 4, Arsenal 3, Man City 2 and Blackburn once, and that was also a bought title.

Whoever buys a club and attempts to compete with the above teams would have to invest (if that's the right word... 'donate' more likely) a huge amount of money to challenge for the Premier League title.

Many rich men have tried and spectacularly failed.

Jim Lloyd
22 Posted 03/11/2015 at 20:22:11
Well, if Randy Lerner had taken us over, maybe we would be sitting in our nice little speck in the King's Dock Stadium.

Maybe, if someone with drive and ambition like Paul Gregg had put Everton's share of the most wonderful stadium we were ever likely to have a chance of.

We have spectacularly failed with no attempt to invest in the club, so no wonder we've failed.

Jay Harris
23 Posted 03/11/2015 at 21:54:00
John,

I don't have anybody in mind... but there are plenty of people with more drive and ambition than this bunch of cronies.

And as regards needing to have big pockets, this crowd of cronies have put zero into the club while expecting at least a 600% return on their shares.

Raymond, the common factor in all your successful teams is a dynamic board who had top managers. Our chairman didn't even get off his sofa to get Martinez in.

Dennis Stevens
24 Posted 04/11/2015 at 01:16:50
Is there really a myth that football clubs are highly profitable ventures? Although the numbers are much bigger now than ever before, it seems to me that this piece is merely stating what has long been said of football club ownership - that it's a financial black hole.

Although there is, of course, the potential for some difference between making a profit from owning a football club & actually running the club at a profit.

Peter Barry
25 Posted 04/11/2015 at 03:13:20
It's about time football joined the real world and started paying players according to their REAL and not PERCEIVED worth. Ridiculous players' wages are what has made football such a bitter pill for any investor to swallow. That and the ravenous appetite of the TV companies who over-sell and over-analyse everything little thing.
Ernie Baywood
26 Posted 04/11/2015 at 03:39:34
Well they get paid that much because they are worth that much. They are the ones that people are prepared to pay to watch on their tellyboxes and it's the TV money that continues to drive the football economy.

Mind you, the day that the TV deals don't increase massively will be an interesting one.

I would say people invest in football clubs for the capital gain rather than the income earning potential. Making it more like buying a house than a business. Of course the property market has been shown to have 'bubbles' but that could never happen in football could it?

Steavey Buckley
27 Posted 04/11/2015 at 14:46:07
If Everton were bought by a high profile company such as Apple, the name Apple would be associated with the Premier League, a worldwide high-profile brand that has support in two of the most populous countries on earth, China and India,. Combined populations of 2.5 billion people who buy Apple products or use them when bought by others.

Peter Weaver
28 Posted 04/11/2015 at 15:56:04
Many posters seem keen to ignore the central tenet of the EPL article viz; 'The presumption that there are wealthier more resourced potential owners out there is a misnomer and a completely false assumption.'

In the whole of British senior league football, there are but FOUR clubs with unbridled wealth – mainly due to the backing of their foreign owners – Arsenal, Chelsea and the two Manchesters. Aspiring to one day join them – although with little hope of ever doing so – are Spurs and RS.

Clinging desperately to the hope of expanding the ranks of top competitors beyond that six are clubs of former greatness such as Everton, Aston Villa and Newcastle Utd – all able to attract regular gates approaching 40,000.

Given that I totally buy into the author's premise above that the billionaires have lost interest, the really big question as we look into future is not whether we can break into that 'top six' for more than the odd season but rather that whoever comes to own us can avoid the fate of our fellow big city clubs who, in spite of having wealthy owners, seem to have fallen into the pits.

So, Europa League and a few cups would seem to be the best we can hope for – Bill or no Bill. It could be a lot worse!

Steavey Buckley
29 Posted 04/11/2015 at 16:19:35
Also, what is needed for someone to build a new stadium to generate more income, alongside money from broadcasting rights and sponsorship. But the status quo is not an option.
Jon Withey
30 Posted 04/11/2015 at 17:06:13
It's not impossible to imagine someone buying Everton.

Most billionaires got where they are by being less than generous with money though.

Unless they were soaked in oil or emotive fans then you'd expect them to do pretty much what 'Bill and his cronies' have done - keep things tight and lap up their returns.

Darryl Ritchie
32 Posted 04/11/2015 at 17:38:49
It's not whether we will be sold, but who will buy us and when? I wish Bill well, but I fear his time at the helm is nearly done. Time marches on, and all that.

The "who" is the billion dollar question, isn't it. As for "when", I think it will be sooner rather than later.

Paul Jeronovich
33 Posted 04/11/2015 at 18:39:52
Just a bit of forward thinking would be a nice start. As I've said Bill cannot be faulted for the work within the community which is by far the best in the country. Just need people at the helm who can take us to the next level both on and off the pitch. We deserve it.
Graham Mockford
34 Posted 04/11/2015 at 20:04:26
Every now and again I read a post and have to read it again just to make sure.

Steavey Buckley #26 is right up there with one of my particular favourites, the one where it was suggested we buy the player Honda then try and strike a sponsorship detail with er..... Honda.

So should Apple buy Everton? I mean a 𧵎 billion pound company is often looking to acquire businesses that have a turnover of 0.1% of their own, especially one that is a football club when you are a technology company.

I mean they are seriously lacking brand recognition, if only they had their name on Everton's shirts people might suddenly find out about the iPhone. (I googled that just to make sure I got the name right.)

And of course what a great brand fit. I mean the world's premium technology brand associated with Everton. They could use it as a staff incentive for those people in Cupertino. A visit to a game, a pint in the Winslow and chips and curry at the Goodison Supper Bar.

Another example of ToffeeWebonomics.

Dick Fearon
35 Posted 04/11/2015 at 20:53:48
I have no need to name what is towering over the skyline from the Wirral and North Wales to southwest Lancashire and completely dominating our very own patch of the city. It is a symbol of Bill Kenwright and his cohorts utter failure to provide our club with a future beyond the next decade.

We are sick and tired of Bill's false promises about new stadiums that disappear soon after season ticket sales are closed. This mob of shysters should be run out of town.

Graham Mockford
36 Posted 04/11/2015 at 21:01:57
Fucking hell, Dick, you must have a big telescope!
Colin Glassar
37 Posted 04/11/2015 at 21:09:29
Fantastic idea, Graham. Does anybody know who the head honcho is at Apple so we can tap him, or her, up? We have a green away kit which is appleish in colour, they might like that.
Dick Fearon
38 Posted 04/11/2015 at 21:11:43
Graham (#35),

No need for a telescope, I can see it in my mind's eye. I feel sorry that decent match-going Evertonians need to pass under its shadow.

Joe Foster
39 Posted 04/11/2015 at 21:15:59
Pepsi would be better as they have blue cans. Second kit could be Pepsi Max as that is a black tin. Oh yes, it was staring us in the face all this time.
Graham Mockford
40 Posted 04/11/2015 at 21:19:16
Colin

Spot on, I can hear it now

"And if you know your iStory"

David Midgley
41 Posted 04/11/2015 at 21:27:00
Graham (#35),

Dick is very modest.

Joe O'Brien
42 Posted 05/11/2015 at 20:18:45
Was at the match last Sunday and a fella said that he heard a rumour that Bill has wiped off our debt from his own pocket to make it easier for a takeover to happen. Was he just winding me up or had anyone else heard anything like this?

And would anyone know if we are we making a profit these days? Intakes from gate receipts and merchandise against wages and operating costs? I know we're in debt but I wonder is that debt growing or going south?
Patrick Murphy
43 Posted 05/11/2015 at 20:42:09
Joe (40) That's certainly interesting to say the least and it might explain why some loans and other items were paid-off towards the end of October, but we won't really know the truth of it all, until the AGM or more likely much later.
Tony Abrahams
44 Posted 05/11/2015 at 20:52:02
Typical Bill rumour, that one, Joe.
John Daley
45 Posted 05/11/2015 at 22:13:16
"...a fella said that he heard a rumour that bill has wiped off our debt from his own pocket to make it easier for a takeover to happen. .was he just winding me up or had anyone else heard anything like this?"

Well, I heard he was defo going to have a right good rummage around before hopefully... and dramatically... raising a triumphant fist full of debt-reducing £50 notes into the air, but then (what bastard luck) his hand got possessed by a stubborn malevolent spirit like in Evil Dead 2 and, after a ferocious slapstick struggle, what ended up being pulled from the cavernous pocket of one William Kenwright was something a little more akin to this:

Link

If he gets a 'thank you' banner flown from a plane simply for being 'a blue', what would he get for wiping out all club debt with his own coin? An absolutely massive rocket shot into space, containing an artistic monkey astronaut specially trained since birth to scrawl 'We fucking love you Bill' on the surface of the Moon with it's own freshly crapped bum crayons that glow bright blue due to said apeonaut being fed on a pure diet of parma-violets and urinal cakes ever since being pulled kicking and screaming from his mother's monkey pussy?

Laurie Hartley
46 Posted 06/11/2015 at 09:38:46
Colin (35)

The guy’s name is Tim Cook. He seems like a very interesting character to me - he plans to leave all his personal wealth to charity when he dies.

https://philanthropy.com/article/After-Steve-Jobs-Apple-Steps/228899

I wonder if any large organisation has ever considered buying a Premier League club and converting it into a not for profit organisation?

Certainly Everton with its wonderful support of Everton in the community would provide a perfect platform for such a venture.

http://www.telegraph.co.uk/sport/football/teams/Everton/11337745/Everton-are-a-shining-beacon-for-football-as-a-force-for-good-in-the-community.html

As Graham at (32) quite rightly points out, Apple certainly have enough money to buy and fund Everton – after all Sheikh Mansour only has 㾽 billion of his own personal wealth.

https://en.m.wikipedia.org/wiki/Manchester_City_F.C._ownership_and_finances

What interests me about that article is that he paid 𧶀M for the club in 2008 and it is now worth 𨀼M. Even if you take into account the losses and expenditure on facility upgrade totalling 𧾡M, it seems he is only down -㿙M.

Eric Myles
47 Posted 06/11/2015 at 09:57:11
Joe #40

1. He was just winding you up
2. We made an operating profit of £5m last accounts
3. Debt is growing (19% increase in the last accounts)

Graham Mockford
48 Posted 06/11/2015 at 11:54:25
Eric

When you say debt rose by 19% are you in fact saying creditors both short and long term rose by 19%?

Eric Myles
50 Posted 07/11/2015 at 07:16:26
Graham (#46), yes, although long term creditors are actually decreasing each year as we pay down the Prudential loan, so basically it is short-term creditors increasing.
Jay Harris
51 Posted 07/11/2015 at 14:50:56
Joe,

A bit like the rumour also started by Bill that he remortgaged his house to buy the shares in Everton ultimately proven to be another of his "fibs".

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